Biggert-Waters Act Impacts Flood Insurance Policies Nationwide

Union First Market Bank's guide to understanding flood insurance reform

Dec 13, 2013, 09:01 ET from Union First Market Bankshares Corporation

RICHMOND, Va., Dec. 13, 2013 /PRNewswire/ -- The Biggert-Waters Flood Insurance Reform Act of 2012 made significant changes to the National Flood Insurance Program (NFIP) that begin to take effect this year. This law requires that increased flood insurance premiums be phased in and existing premium subsidies be phased out.

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As a result, property owners in "Special Flood Hazard Areas" may see more expensive insurance rates, in some cases significantly more, than what they are currently paying. Increases in premium rates for previously subsidized non-primary residences were implemented this past January. Beginning on October 1, 2014, premium for business properties with subsidized premiums and residences that have had "severe repetitive loss" will increase when a flood insurance policy is renewed.               

"Union First Market Bank recognizes the impact the Biggert-Waters Act will have on households and business owners throughout Virginia, and we are committed to helping property owners prepare for this additional financial pressure in any way we can," said G. William Beale, chief executive officer of Union First Market Bank.

The new premiums will reflect the true flood risk of homes and businesses. Premiums will have the potential to reduce the risk-rate subsidy previously given by as much as 25 percent per year for the next four years until full-risk rates are reached.

Flood insurance premiums are calculated based on Federal Emergency Management Agency (FEMA) maps and the minimum "base flood elevation" for that region. An owner whose home or business is built at or above the base flood elevation, or "BFE," will be at an advantage. Their premiums may still go up but will be lower than those for homes that do not meet the minimum requirements.  Property owners in special flood hazard areas will need to know the elevation of their home or business in relation to the BFE.  An insurance agent cannot calculate the new premium without an elevation certificate.

"If you're rebuilding after a flood, be sure to consult FEMA maps prior to construction," said Beale.  "Building in compliance with base flood elevation standards could protect your financial future."

Consumers can expect the following five things from the Biggert-Waters Flood Insurance Reform Act:

  • Automatic increases. Policy rates for primary residences are automatically subject to increases if there has been change in ownership, a lapse in coverage, a change in flood risk according to new FEMA flood maps, or substantial damage or improvement to a building.
  • Diminishing discounts.  Existing subsidies for second homes, rental homes, businesses or repetitive loss properties are eliminated. "Grandfather" clauses will also be eliminated, meaning all rates will be based on the building's compliance with current flood zone recommendations, not the standards when the building was first built.
  • Updated flood zones maps. FEMA is redrawing flood zone maps across the country. That means buildings might now be in a flood zone that weren't before, or they're now in a higher-risk zone. These zones determine minimum building requirements and whether you meet these minimums determines what your insurance will cost.
  • Higher annual increases. In the past, annual premium increases were limited to 10 percent; that limit is now 20 percent.
  • Programs are available to help. FEMA offers three programs to reduce your risk and help you save money on flood insurance. To see if you qualify, visit

For more details on the Biggert-Waters Flood Insurance Reform Act, visit or call the National Flood Insurance Program Help Center at 1-800-427-4661.

Headquartered in Richmond, Virginia, Union First Market Bankshares Corporation (NASDAQ: UBSH) is the holding company for Union First Market Bank, which has 90 branches and more than 150 ATMs throughout Virginia.  Non-bank affiliates of the holding company include: Union Investment Services, Inc., which provides full brokerage services; Union Mortgage Group, Inc., which provides a full line of mortgage products; and Union Insurance Group, LLC, which offers various lines of insurance products.  Union First Market Bank also owns a non-controlling interest in Johnson Mortgage Company, L.L.C. 

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SOURCE Union First Market Bankshares Corporation